When a relationship ends, one of the first and most pressing questions that springs to mind is:- ‘how do we divide our assets?’
Learning how assets are divided after separation can influence your decision about whether to separate, when to separate, or what you do before separating. It is important to seek specialist family law advice early on in separation or, ideally, before separating.
Are assets divided 50/50 in every divorce or separation?
Contrary to popular belief, it is not the case that assets are divided 50/50 in every settlement. It is also generally unhelpful to compare your situation to that of divorced friends or family members. This is because every situation is unique and there is no set ‘formula’ for dividing assets.
Whether or not you are married or have been in a de facto relationship, working out how your assets should be divided is based on a consideration of the following questions:
It is not uncommon that parties have limited insight into their spouse’s financial situation. This makes it difficult to consider the matters set out above.
Importantly, each party to a separation is required by law to make what is called a ‘full and frank financial disclosure’ of their respective assets, liabilities, superannuation interests and financial resources. Nobody is expected to be ‘kept in the dark’ about their spouse’s assets.
The financial disclosure process generally involves parties, or their lawyers, exchanging copies of financial documents such as their income tax returns, pay slips, bank statements, vehicle registration papers, loan statements, business financials, trust deeds and superannuation summaries, just to name a few.
Family Law valuations
If there is a dispute about what a certain asset is worth (like the family home) that asset may need to be formally valued for family law purposes. Although appraisals and estimates for value can be useful, formal valuations carry more weight. It’s best to speak to a family lawyer before spending money on a valuation as you might not be able to use it. This is because there are certain rules around valuations and what is accepted by the family law courts.
As you can see, it’s not possible to determine what split of assets you are likely to receive without first carefully considering the factors set out above and doing your due diligence.
You or your former spouse may be keen to get things sorted quickly but remember that the outcome of a financial settlement can have a huge impact on your financial future and security. It is generally best to get the full picture and obtain expert advice before you make any major decisions.
How long after divorce can you claim assets?
Separated spouses can formalise a property settlement at any time after they separate. There is no need to wait, and you don’t need to be divorced to claim assets or finalise a property settlement.
However, it is important not to rush things and to make sure that you are fully aware of your legal rights and entitlements when it comes to property settlement. People are often emotionally distressed immediately following separation and not in the best state of mind to make big decisions. How you divide property, including superannuation, can have a huge impact on your financial future and stability. It’s important to seek specialist legal advice and make sure you have all the information that’s needed to make the right decisions when it comes to a property or financial settlement.
Although people talk about ‘going through a divorce’, applying for a divorce order to dissolve your marriage is a separate issue to formalising a property settlement. You cannot apply for a divorce in Australia until you have been separated from your spouse for 12 months. As mentioned, you can finalise a property settlement before this.
Importantly, once a divorce order is granted and comes into effect, you then only have 12 months in which to make an application to the Court seeking a property settlement. For this reason, many people apply for a divorce order after they have formalised a property settlement.
Can my spouse take everything in a divorce?
Like the answer to many questions when it comes to divorce, the answer to this question is ‘it depends’. However, if you have both made contributions towards the acquisition, maintenance and/or improvement of assets of the marriage, it’s unlikely that your spouse is entitled to everything. How assets are split in a divorce depends on the individual facts and circumstances of each marriage or relationship.
As detailed above, what you and your spouse are each entitled to in a divorce settlement will depend on what assets, liabilities, and superannuation are owned by each spouse, what financial and non-financial contributions were made by each spouse to those assets, and each party’s ‘future needs’ (which looks at each party’s income earning capacity, who has the primary care of any minor children, and the health status of each party).
Can my spouse claim my inheritance after divorce?
This is an issue that worries many of our clients. Inheritances come with feelings of strong moral and emotional attachment.
If an inheritance is received during the marriage, or after separation, it must be disclosed to the other party. How an inheritance is treated will depend upon the particular facts of each case, including when the inheritance was received and how the funds were applied. For more detail in relation to the treatment of inheritance in a divorce settlement, see our article Can my ex spouse claim my inheritance after divorce?
Having an initial consultation with an experienced family lawyer will give you direction and an understanding of what you are likely to end up with, or what the next steps are to achieve a legally binding property settlement.
There are many options available for reaching a settlement, including negotiation, mediation, collaborative process, arbitration and, as a last resort, Court. No matter how you get there, it is important to formalise at settlement in court orders or a binding financial agreement.
If you would like to speak to us about your family law issues, please contact us to arrange an obligation-free initial consultation. Further information about property and financial settlements can be found here.